Examination Of The Rules Adopted By Indian Courts Vis A Vis The Meaning Of Words Embedded In Insurance Policies
Sravishtha T, Jindal Global Law School
Aayushi Sibal, Jindal Global Law School
ABSTRACT:
Insurance contracts are embedded with special characteristics which exercise a direct bearing on the rules of interpretation applicable in construing policies. These rules operate differently in insurance contracts as compared to other contracts, because they are altered to suit the myriad of complexities that arise while drafting insurance contracts. The special characteristics of insurance contracts include a) first, their subject matter is abstract in nature and that insured consumers find them difficult to comprehend due to various informational and economic shortcomings; b) insurance contracts are a standard or adhesion which means that the insured’s freedom to negotiate the terms and conditions of the policy are limited; c) Lastly, the contents of insurance contracts are elaborate and ingrained with concepts that are often difficult for a layman to comprehend.[1] To this end, this essay offers a comprehensive breakdown of interpretive tools in an insurance context i.e. literal rule, purposive interpretation and the doctrine of contra proferentem along relevant judgements in the Indian jurisprudence, and further examines the Indian Court’s usage of the aforesaid interpretive tools on insurance claims arising out of business losses incurred due to the pandemic.
[1] Schwartz Dudi, ‘Interpretation and Disclosure in Insurance Contracts, Volume 2, Issue 21 2008’
